tv Bloomberg Technology Bloomberg May 16, 2017 11:00pm-12:01am EDT
>> you are watching bloomberg, let's start with the track of your -- check of your first word news. h.r. mcmaster said information shared by president trump with russian officials last week was appropriate, and the safety of a key intelligence source was never compromised. mcmaster initially dismissed the story as false. the new york times, citing a current and former american official, says the class of -- the classified intelligence was provided by israel. israeli officials did not confirm they are the source. president trump is scheduled to travel to israel next week. senate majority leader mitch mcconnell recommends merrick
garland as fbi director after mcconnell played a part in blocking president obama's attempt to confirm garland to the supreme court. mcconnell says the gop could use less drama at the white house. president trump welcomed the turkish president erdogan to the white house for their first face-to-face talks. trump and the two countries, he says, must battle the islamic state together. he also noted cooperation between both nations at the nato, u.n. and the group of 20. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. from washington i'm alisa , parenti. this is bloomberg. bloomberg technology is next. ♪
emily: i am emily chang and this is "bloomberg technology." cybersecurity stocks jumped in the wake of the global wannacry hack attack. many believe north korea is behind it. the next act. a former ceo joins us to talk about his new fund and where he is placing his bets in a bloomberg exclusive. apple hits refresh with a new line of the macbooks set for june. first to our lead. we take a look at the evolving threat landscape in cyberspace. this as president trump discusses highly classified intelligence in a meeting with russian officials last week. the national security adviser says the information the president shared was appropriate, and based on open-source reporting. take a listen to general h.r. mcmaster defending president trump's actions from the white house. >> what the president shared was appropriate.
the story combined what was leaked with other information, and insinuated about sources and methods. i wanted to make clear to everybody that the president in no way compromised any sources or methods in the course of the conversation. emily: this is on the heels of a global cyber attack that is causing the intelligence community to work overtime. what are the implications of both events for the intelligence community? mike riley covers cybersecurity for bloomberg news and joins us from washington. this is some the heels of the president abruptly firing the head of the fbi. i'm curious, is trump having an impact on what is going on in cyber world? are we more or less vulnerable to a cyber attack because of the actions of the trump administration? >> any impact is emboldening attackers.
a lot of people thought trump would be more aggressive in the cyberspace. the executive, the cyber executive order that showed a different tact. when the order came out last week, it was more of the same, and if anything, that seems to have emboldened the attackers. we had not just this massive rant somewhere --ransomware group, but the shadow said they might decide to do a dump a month, which means they would release a new set of tools that the u.s. uses in cyberspace every month, which could be -- which could have a devastatingly negative impact. emily: talking about this ransomware attack, what information do we have, is it contained yet, do we have the origin? mike: the investigation behind who it -- who was behind it on a
global level, the first wave of attacks has been contained. people are looking for new versions, and they have spotted a wannacry 2.0 that behaves in -- that may or may not be in the same -- from the same actors, but behaves in much the same way. attention is focused on, who did this? there is some reporting that it may be linked to north korea. if so, this becomes a state operation. a couple things might affirm that diagnosis is the timing. the attack was released around the same time north korea did a new missile launch. some of the things that might count against it is, we know the ransomware about $50,000 in bitcoin. this is a nationstate trying to fill its coffers because it's suffering from sanctions, it is not very effective. emily: microsoft is blaming the u.s. government.
the u.s. government is pointing fingers at microsoft. who is to blame, as for how it got out of control? mike: microsoft is not going to come out of this looking good. there was a patch issued when the initial vulnerability was leaked by the shadow brokers. everybody knows the not everybody does patches in the way microsoft would like them to. there is a question, whether microsoft ought to shift their operating systems that is safer to begin with. they might rethink the process. however you look at it, microsoft is not looking good. is it the intelligence agencies, or is there a way to look at these full and our abilities first developed in the nsa, that then, themselves had an insider hack that allowed the information to be released? that is the way nationstates work. china and russia do this.
everybody does this, it is how they spy. i'm not sure if we should point the blame at what that nsa for what it is designed to do. emily: mike riley d.c., covering cybersecurity, thanks for the update. the industry as a whole rallied off the news of the ransomware attack. symantec says they were able to block at least 22 million attempted attacks. security experts saying they may know who is behind them. joining me, symantec's ceo. you were nodding as mike was speaking. your researchers believe north korea was behind it? >> we have produced evidence that shows the people who were involved in attacks were linked to north korea. some of the code of the used, fragments of the attack are present. it does not mean north korea did it, it means there were fingerprints from the same type of malware.
like the gentleman before me mentioned, the thing that would indicate that might not be the case is the size of the ransom request does not line up with the size they would usually request. they were linked to an attack in bangladesh. that was an $80 million story. if you can get into systems and ransom them to take them back, it is usually higher than 300 u.s. dollars in bitcoin. that fact does not help with that thesis. i think what may be another case that is here is that some smaller group got a hold of the nsa vulnerability leaked by shadow brokers and wrote an amateur piece of malware that got out of control. it was targeted at consumers and ended up where it was. the ransom request is not great, so a few theories are being worked. law enforcement is all over this. there are things we should not talk about because we are on it. the other point the gentleman made, microsoft, are they culpable for this?
that is definitely something we should talk about. i think microsoft has come a long way in recent years in hardening their operating system and their patches. this is about vulnerability, and vulnerability comes, people become aware of them and catch them. this is about i.t. and consumers being very quick to adopt the latest patches, whether it be an apple product, a google product, and android a microsoft product. , emily: you say you blocked 22 million infection attempts. how many didn't you catch? greg: we had a small number of customers report that they have -- had an infection. a really small number, in hundreds of thousands of enterprises that run our products. our products were blocking this long ago. we had artificial intelligence in our products that blocked it without any help.
they stopped it all by themselves. that is a step forward in the industry. i think we have situations where other vendors may have been the defense there, who also had blocks for it but maybe weren't updated. that is how things got out of hand in europe. emily: so that is the lesson learned here. the u.s. was largely unaffected. why was that? greg: the u.s. was unaffected primarily in our view, because , the great researchers that got on the problem early and work it found a situation in this malware that would turn it off and make it go dormant. that was put in place on friday night. by the time people woke up and the propagation got to the u.s., the malware was already dealt with from a dormance point of view. it might have still been propagating everywhere, but not destroying the systems. emily: do you expect spending on symantec products to increase as a result? greg: definitely. every time there is an event like this, cybersecurity firms
, we fared very well, which is usually an increase in pipeline. we are starting to see that. the future is bright for us. awareness is there. i think we are not the kind of firm the gets up and bashes our competitors or platform vendors. we are here to fight cybercrime. we shared our information with the cyber threat alliance, a thing we are a member of that as network security players in it. we shared that on friday. we are trying to help the whole industry. we are a good operator and we have a huge investment of research in this area. emily: what trends are you seeing under president trump? is the threat landscape changing as a result of the actions of the trump administration? greg: i would say cyber criminals are somewhat emboldened, not just by the trump administration, really, i think emboldened by the effectiveness of the attacks.
we heard about things in saudi arabia in january that were very concerning. nationstates operating outside the u.s. there are more , consequences in the u.s. cyber criminals are more emboldened. we produced an annual threat report a couple weeks ago. ransomware that is up 36%. consumers,ted at because there is no cio. the average cost is -- has gone over $1000 to repair. this problem is a way of making money for criminals, and it is definitely an effective thing on consumers and their digital safety. emily: we will continue to follow the ripple effect of the attacks felt around the world. greg clark, thank you so much. greg: thank you. emily: in today's revolving door, twitter cofounder biz stone is rejoining the company six years after he left and two
months after selling his start up to pinterest. he says he will be focused on company culture and won't be replacing another executive. we spoke to stone last october and spoke about the challenges at twitter. >> i don't follow the small up -- ups and downs. great -- and downs. great leadership thinks in terms of decades, not quarters. i am waiting. jack is, in the grand scheme of things, jack has just gotten the job. he has only had it for a year. that is nothing. emily: shares of twitter jumped following the announcement. bloomberg news is among twitter's video partners. a former google ventures ceo is coming back to the vc world completing his fundraising for , his new investing firm. we will hear from him
emily: after saying he was out, bill maris is returning to the investing world. the founding ceo of google ventures has raised $150 million for his new fund, called section 32. joining us in an exclusive he oversawbill maris , many startups. great to have you back. >> great to see you. emily: you said we were at peak vc, the market is too crowded. what changed? >> i'm back. thank you.
i think we are still at peak vc. i was not happy with the fund i was constituting in terms of the investor rates, so i took a minute to reconstitute it and build a smaller, more focused fund. i think the majority of the companies i will invest in are built around relationships i have built over the last 10 years. emily: if we are at peak vc, and goldman sachs says there is a -- is money penned up to invest in technology how do you break , in? bill: hopefully i do not have to break in hopefully i am in , already to some degree. with a smaller fund i have the , advantage to be very selective in the people i hire. selectivity is your ally. emily: you do not often see lone wolves in vc.
you are doing this in san diego. you are not just investing in health and biotech, but tech proper, which is competitive. how do you think you can step up? bill: i have lived in san diego for years. i exist in the cloud. coming out of san francisco, the idea we are limited by geography is crazy. one fund is the best returning fund of all time and he didn't live in san francisco. stay tuned on that front. emily: so you don't plan to do it by yourself? bill: no. for now, but not forever. emily: where will you be placing your bets? what is exciting to you? bill: more readily available in my mind are the things that are getting excess attention. ai, machine learning, etc. even health care, which i have been an advocate for, has become a very trendy area for
investment, which means subject to over funding. that leaves huge parts of the market available, whether in agricultural tech or other applications. for example i have been looking , at the food chain. emily: interesting. we have been talking a lot about juicero. i am sure you saw, bloomberg did a piece about how it is a juice machine that got hundreds of millions of dollars in funding. our reporters discovered you could squeeze out just as much juice by hand as with the machine itself. was that a mistake? bill: i don't think so. we don't know how the company plays out. they have great leadership. they have ample cash available. it is still going. my time in the valley has taught me one thing, that some people, when they see a balloon, they want to pop it. they want to poke at it. so i would say, there might have been too much kicking someone when they are down. emily: what about uber?
lots of pr issues over the last few months lots of culture , issues, lawsuits. what has gone wrong? bill: the parallels between uber and what is going on at the white house are hard for me not to draw. they are having a bad time. fundamentally, that is due to a fundamental lack of leadership. there are a lot of great people there, friends of mine and i , would love to see the company pull out of this, but they are having a bad couple months. emily: you are comparing them to donald trump. how so? bill: you are -- i said the white house and uber. when it comes to the white house, i think we should be gravely concerned with what is going on there. at least i am. emily: wide? bill: the first time in my life i have ever felt our institutions are unstable or unpredictable, and i think there is one thing that we as a people should cherish, a little bit of consistency and reliability in our federal government.
i think it is a confusing time. emily: what does that mean for uber? you have a company that is transformative, that is in a period of struggle. google faced that, facebook faced that. it is an unprecedented situation, a company of such scaled about -- available to consumers all over the place. i don't know how it plays out from here, but i am hopeful. emily: is travis the right person to lead the company? bill: i don't think i am the right person to answer that. i don't work there. i haven't been in their offices in a long time. i think the employees of uber are the right people to answer that question. emily: how is trump impacting the landscape -- the funding landscape of silicon valley?
is he having an impact? bill: markets like predictability and not unknowns. there are a lot of unknowns in washington and surprises. some of those are not pleasant. every time i turn on the news every morning i think what crazy , thing has happened this morning? that creates general anxiety. it is not good. it is not good for people. emily: how will that influence the choices you make when running your new fund? bill: i do not know, i think we will see. i have never been influenced by washington and policymakers outside of, they set the ground rules of the way the market operates. those have not changed much. the instability in washington is something to keep an eye on. emily: bill maris, excited to see what you do. thanks for stopping by from the cloud. coming up, instagram is adding another signature snapchat feature. we will bring you the details, next. this is bloomberg. ♪ ♪
emily: ant financial is delaying ipo plans after losing ground in china's digital payments market. according to people familiar with the matter, alibaba wants to improve performance and probably will not go ahead with the offering this year. the company was valued at $60 billion and a fund-raising round -- in a fund-raising round lasted disney is being held june. ransom by hackers. the ceo revealed a news to employees monday. the hackers claim to have stolen an unreleased film, identified by hollywood news outlets as the latest "pirates of the caribbean" movie, and are threatening to distributed online. this is part of an attack inecting 200,000 computers 150 countries. it came two weeks after netflix confirmed hackers leaked new episodes of its series "orange
is the new black" after the company refused to pay a ransom. instagram is adding a signature snapchat feature, the ability for people to digitally add animal ears and flowers to their selfie. facebook ceo mark zuckerberg says camera tools will be a major strategy this year as a stepping stone to an augmented reality world. more than 200 million people use instagram stories per day, snapchat's 166 million users total. we tackle the intersection of politics, technology and culture with an author, on his new book. that is next. on the hunt for criminals behind the silk road. check us out on the radio. you can listen on the bloomberg radio app and sirius xm. this is bloomberg. ♪ >> it is 11:29 in hong kong,
12:29 in tokyo. bloomberg has been told president trump asked fbi director james comey to drop an investigation into former national security adviser michael flynn. our source claims to have a copy of a memo that comey wrote following the conversation. the director did not directly respond to trump tossed requests, which came a day after flynn was fired for lying about contact with the russian ambassador. >> we are to ask the director to come in and testify. that is the first step. we have to ask if there were
notes around the conversation. that would be powerful evidence of what took place in the conversations. and then, i think we follow up from there. if the president was being haveful that he might tapes, we want to get a hold of those. >> the white house is struggling to contain the fallout from claims the president shared the classified information with russia. national security adviser h.r. mcmaster said the premise of a washington post report into the oval office meeting was false and describes what the president said to sergey lavrov as appropriate. aviation regulator turning a labor watchdog to halt -- they forced airlines to cancel flights at the last minute. the proposed changes would make pilots provide at least a year's notice before changing jobs.
they may upset market leader plans later this year. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> checking in on asian markets. politics and the u.s. taking front and center. the dollar bear the burden of risk. treasury yields hopping around 2.3%. gold up a fifth day. the yen below 113. crude losing nearly 1%. energy and financial stocks are leading the drop in asia. shares continuing to drop over 1%. the aussie -- s&p global reaffirms the country's aaa rating. we do have chinese stocks fluctuating today, given what
has been happening with the , notaging of the pboc looking to drive interest rates higher. the chinese 10 year yield from a main height. ♪ emily: this is "bloomberg technology." i'm emily chang. let's get back to our lead, the fallout over claims that president trump discussed highly classified intelligence in a meeting with the russian foreign minister and ambassador last week. this, paired with news of a massive cyber attack that has swept the globe, has huge implications for the intelligence community. joining us from l.a., nick bilton, special correspondent for "vanity fair." he writes about technology, politics, business, and culture. he is the author of a new book, "american kingpin: the epic hunt for the criminal mastermind behind the silk road." in writing this book, you got an up close and personal look at the cyber underworld.
we have a situation at the white house changing minute to minute, a potentially warmer relationship with russia. how do you think this is impacting the cyber threat landscape? nick: i think the landscape is -- cyber threat landscape is becoming the new threat landscape. we are entering an era where everything is connected to the internet. as we saw this weekend with the ransomware attack, hospitals can be taken down, power grids, you name it. we are just starting to see the beginning of this. the terrifying thing is that when these things happen, the government has no idea who would be responsible, how long it will take to solve it, and so forth. we were lucky this weekend there was a simple fix put in place to solve this problem. but in the reporting i have done about hackers and the things that go wrong, there are pretty terrifying things out there. it's not just computers, but infrastructure that powers everything we do every day. emily: what do you imagine the impact of president trump and
some of his actions are on this landscape? nick: i actually don't think president trump understands this threat landscape. i have spoken to people who have spent time with him, and when he was going around to all these media outlets before he became president and people would bring these things up it is just over , his head. he doesn't necessarily use computers on a daily basis. he barely uses a smart phone. these things are literally over his head, and he has not staffed the white house with people who can help solve these problems. he has instead gotten rid of people like james comey who have a full understanding of this. we were incredibly lucky this time. i think there will be an instance in the not-too-distant future where some sort of cyber attack will wreak havoc on the u.s. whether it is the financial , markets or power grids. emily: speaking of the ransomware attack, the currency of this attack was bitcoin.
the perpetrators asking for ransom to be paid in bitcoin which is the currency of the , silk road. what do you make of that? >> no one knows who created bitcoin. it has only been around for a few years. it is supposedly untraceable. with the silk road, it was not completely untraceable. there are people who do money laundering to hide it. bitcoin goes across nationalities, across currencies, across borders. it doesn't matter. someone in north korea can tell meeone in america, pay bitcoins at $1500 a piece, and six there is no way to trace who got it, how it got there or how , it turned into physical cash later on. emily: your book talks about this epic hunt for this guy, a young guy who founded the silk road, which is basically an online marketplace for drugs, guns, poison. what are the lessons to be
learned here? you make ties to the tech companies of today. nick: i think one of the things that is fascinating is that this kid, he's from austin, texas, he had this very simple idea -- what if you could make a website where you could buy and sell anything using bitcoin? and then tor, the web browser people used to get on the dark web. and then he built it. just in the same way travis and his team built uber, and sergey brin built google, it's the same thing. a couple years later he's on track to do $1 billion in sales of illegal drugs and guns, and he's cloaked by all these tools that people are now using to hold companies accountable -- hostage, and require them to send bitcoin to send money. i think what i saw in the
reporting is how difficult it was to figure out who this kid was. you had teams of agents from all over the government, fbi, dea, irs secret service, and it took , two and a half years. it was a lucky break that got them there. emily: is it a call to action to tech entrepreneurs, whether it is uber, or airbnb, or snapchat? nick: completely. when you think about how reliant we are on technology today, let's fast-forward and think and five to 10 years when we had driverless cars. do we think a country like north korea has to worry about getting a nuclear bomb over los angeles when they can just hack into the nuclear car network and make them crash into each other? or shut down a power grid by using the same technology the u.s. tried to use with iran? when you see the speed with which these technologies go from an idea like the silk road to
becoming a multibillion-dollar business, you can see how they can be used nefariously by bad actors. there are a lot of them out there in the world today. emily: one last question since you also wrote a book about twitter. we saw snap shares go off a cliff after earnings. facebook is copying snapchat features unabashedly. is snapchat the next twitter? nick: i don't think so, actually. i have spent time with all the ceos from these companies. i have always been incredibly impressed with evan spiegel and his ability to understand what millennials want. we have seen mark zuckerberg copy snapchat, and it hasn't worked. it is currently working a little bit with stories on instagram, but i think evan has a lot of tricks up his sleeve. don't forget when twitter and , facebook went public, both company's shares fell between -- i would not be selling my
snapchat shares if i had them. i think they will be fine for the next two quarters. emily: interesting. author of the new book, american kingpin," and writer for "vanity fair," special correspondent, nick bilton, thank you for joining us. a tech mover, shares of etsy rose the most in almost two years. etsy jumped as much as 23% in earlier trading, the most since july 2015. the stock is still down about two dollars a share from the april 2015 ipo price of $16. coming up, we take you across the pond and speak with a major player in a tech space. how they plan to whether the brexit storm, next. this is bloomberg. ♪ emily: caroline hyde standing
next to a major player in the fintech space. caroline: i am with the founder and ceo, one of the largest peer-to-peer money transfer services in the u.k.. helping with more than one billion pounds per month, they have raised millions in funding to date. -- bigrs include investor names. thank you for joining us. a key player in the european unicorn space. and you are profitable. talk to us about whether profitability was always something you were driving towards. >> we have always known since we
hit critical scale we would get to the permit ability part. now we are getting to a point where we are moving one billion pounds a month. we have hit stability. however, our goal remains investing for the future and making sure we can have an impact on user base five or 10 years down the road. caroline: do you have to have the pace of growth rained back slightly, or can it be mutually beneficial? >> i think it can be mutually beneficial. it is important to make sure on a country by country and quarter by quarter basis we have strong economics always. reachhe corridors critical scale, they break even. but making sure the company's sound is important for any business. caroline: has there been pressure from investors to become profitable? is their wariness about the sustainability business model
or is there something you have been worried about? >> i do think there was a change in the market one or two years ago, where there was growth changing. but i do think companies that have proven they have sound financials underlying growth, high always been able to raise money. and i think the switch was pretty small. maybe some companies were going too crazy and calling for attention. caroline: do you think the likes of airbnb and uber are going too crazy? >> they seem like two totally different companies. with uber, we do hear about massive losses. it is hard to compare them. but i do think they are doing well. caroline: is that a european mindset that makes the investor base a little more cautious, the entrepreneur a little more cautious, therefore looking for profitability faster?
how do you think we in london, particularly escalating in fintech, but not in other areas, compared to other areas like silicon valley? >> i think it goes back to the beginnings and how many companies are being started in europe. there's a difference in the risk appetite. less companies being started, so you have less companies that get to scale to growth and maturity. it is part of the different mindset that people will take less risk because failure isn't so tolerated, so they might focus more on becoming profitable sooner. caroline: i see. therefore, this is something that is interesting. european startups are about 60% profitable. perhaps that would be lesser if you look at the united states. when you have profitability, are you looking to raise more funding?
you are certainly expanding. you just launched in asia. >> we are in a very good position regarding funding and financing. so we are focused on how to make sure we keep growing as quickly as possible. we grew more than 100% last year and we will continue to do that. for us, the question is how we double down on small to medium businesses, how do we look at expanding into other areas. caroline: talk to us about where you are investing to sustain growth and where you might be expanding into new areas of product. is it all about hiring engineers, or are you in the marketing phase? is it about areas close to transfer of funds and finance -- foreign exchange, but not expanding the product suite? >> we are a team of 700, which is quite sizable, but we are hiring across all fronts. engineers, marketers, we need to keep growing the business.
we are doing it in multiple geographies. a couple weeks ago we launched headquarters in singapore. we are still busy hiring in the u.s. and london and mainland europe. we launched a small to medium business last year, and we are very excited about it and looking at growing it significantly. there will be some more announcements later this year about adjacent areas. caroline: you are fascinating. you are estonian, worked for ande, bought your startup brought it to the united kingdom. on your page you have it say founded by immigrants, built by immigrants, used by immigrants. how much has brexit affected your business? these are geopolitical trends throughout the world. how much has brexit affected your business, how much does it change our opinion of growing the business here in the u.k.? are you committed to the area? >> we are definitely committed to being in london. it is headquartered in london
and it is today the capital of the world. however, we can't not talk about two things. one is access to talent. every fast-growing company thrives on talent. it becomes harder for foreigners to move to the u.k., especially it will hurt the ecosystem here. and as a result jobs can be , created elsewhere. the second is passports. season -- a fantastic system today. caroline: unlike the u.s.. >> the u.s. is state-by-state. that type of passporting is unlikely to survive. for business contingency, we have to look at how we look at customers on the european side. caroline: always wonderful to have you. a very successful entrepreneur. some big backers behind you. we look forward to seeing how you continue to grow. thank you.
-- to the part of the genome we are targeting a two. >> there up unix want to start human trials by 2018. >> they're moving at a rapid pace. if you are to ask me to her three years ago how long it would take to get to the clinic, they would've predicted a much longer time frame than what we are staring at now. >> therapeutics want to start by genetically engineering the cells of people with rare blood disorders. outside the body, before putting them back in. editas aims to inject tools into people with a rare blindness. his company has not given a timeline for when it will put products into people. >> given the fact we are modifying dna, which we have not been doing with other therapeutic approaches, there
are considerations we need to be thoughtful about. >> scientists and china are moving faster. researchers there started the first chris berg human front last year. scientists have used it to modify the genome of human embryos. >> where do you draw the line? curativeotentially treatment for a disease, versus an enhancement to an individual. leadingow, the three companies in the u.s. are focusing on tackling this. >> the issue is about investor ship. who actually invented this? the groups aren't both sides. in february, the m.i.t. and harvard institute sent off a challenge to uc berkeley,
keeping them both alive for now. and crispr are appealing the decision. >> it is hard to say which will be the best at developing drugs. >> ultimately, human trials will tell us more about how this revolutionary technology looking into our genes and health. >> we only beginning to understand there are 6000 genetically defined diseases. there is a very long list of patients who could potentially be helped by this approach. that does it for this edition of bloomberg technology. this wednesday we'll be covering the google conference. and scott hoffman, google's vp of engineering. this is bloomberg. ♪
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